Tag: Electric Grid

Policymakers Sharpen Focus on Grid Reliability

Posted on by Abigail Grenadier

Recent legislative hearings and administrative initiatives have highlighted the critical need for a resilient and affordable electricity supply.​

The Big Picture

  • EPA Administrator Lee Zeldin’s initiative for “Powering the Great American Comeback,” and DOE Secretary Chris Wright’s 9-point plan for US “energy dominance,” outlined agency strategies emphasizing permitting reform, strengthening grid reliability, expanding U.S. energy production to fuel economic growth, and position the U.S. as a global leader in AI and advanced energy technologies.
  • As The Roundtable’s Policy Guide on building performance standards states, the transition to a digital economy raises serious concerns about electricity availability. “AI could soon need as much electricity as an entire country” as “[v]ast swaths of the U.S. are at risk of running short of power.” (Roundtable Weekly, Jan. 25)

Why It Matters

  • Policymakers and industry leaders are debating how to balance investment in renewable energy, transmission infrastructure, and traditional baseload generation sources to ensure stable electricity supply. (E&E News, Feb. 26)
  • During this week’s joint address to Congress, President Trump emphasized the administration’s focus on reducing energy costs: “A major focus of our fight to defeat inflation is rapidly reducing the cost of energy … That’s why, on my first day in office, I declared a national energy emergency… It’s called drill, baby, drill.”
  • In a new report from The Center for Strategic & International Studies warns that while AI is digital, its biggest hurdle is physical infrastructure. The report explores using President Trump’s energy “emergency” declaration to fast-track permitting and urges a stronger DOE role in accelerating nuclear projects. (Axios, March 5)

Congressional Hearing

  • Industry experts argued that regulatory hurdles are slowing energy infrastructure projects, creating a gap between federal energy goals and grid capacity. (Latitude Media, March 5)

Clean Energy & Economic Impact

  • The American Clean Power Association (ACP) reports that while the Inflation Reduction Act (IRA) has boosted clean energy investment, uncertainty over efforts to cut tax credits raises concerns about long-term project financing.
  • In 2024, U.S. developers added 48 gigawatts of new utility-scale solar, storage, and wind capacity—a 33% increase from the previous year. (ACP Report, March 5)
  • The clean energy industry argues that wind and solar projects can be built faster than natural gas and nuclear, making them essential for stabilizing the grid. (E&E News, Feb.26)
  • 79% of operational clean power capacity is now located in Republican-held districts, with GOP districts also home to 77% of new clean energy additions last year. (PoliticoPro, March 5)
  • North America’s data center sector doubled its construction supply in 2024 to a record 6,350.1 megawatts (MW), underscoring the increasing power demands of AI-driven computing, according to CBRE’s latest North American Data Center Trend Report.  (ConnectCRE, March 4)

The Real Estate Roundtable will continue working with the administration to advance policies that streamline energy project approvals, strengthen grid resilience, ensuring a stable, reliable power supply to fuel economic growth and innovation.

Electric Grid Strain: CRE’s Role in Addressing Energy Challenges

Posted on by Abigail Grenadier

Demands for artificial intelligence (AI), advanced manufacturing, electric vehicles, and building electrification are straining the U.S. electric grid—creating challenges and opportunities for commercial real estate (CRE). (Deloitte, Dec. 9)

Why it Matters

  • The grid is at a “tipping point.” Heightened demands for power by consumers, businesses, and government are posing significant risks to energy reliability and driving data center construction to meet the needs. (PoliticoPro, Dec. 18)
  • The organization authorized by Congress to assess grid capacity highlighted last month the “critical reliability challenges” needed to satisfy “escalating energy growth,” as retiring power plants age-out of service. The report also noted the need to accelerate construction of transmission projects to bring electricity to the nation’s cities and suburbs. (N. American Electric Reliability Corp., 2024 Assessment.)
  • President Joe Biden is expected to issue an executive order as soon as today to boost the construction of data centers on federal land to support AI, while also aiming to increase geothermal and nuclear energy production to power them. (PoliticoPro, Jan. 9)
  • Data center construction is surging to meet demand with site selection largely driven by power availability. Microsoft and Meta recently announced billions of data center investments. (E&E News, Jan. 10 | CBRE, Aug. 2024)
  • The Department of Energy (DOE) estimates data centers could consume up to 12% of U.S. electricity by 2028, largely attributed to demand from cloud and AI providers. (DOE News Release, Dec. 20)
  • As The Roundtable’s Policy Guide on building performance standards states, the transition to a digital economy raises serious concerns about electricity availability. “AI could soon need as much electricity as an entire country” as “[v]ast swaths of the U.S. are at risk of running short of power.” (Roundtable Weekly, Oct. 11)

Bipartisan House Report on AI

  • Policymakers and industry leaders are focusing more than ever on solutions to expand power generation and modernize the grid.
  • The Bipartisan House Task Force on AI released a report last month finding that AI’s critical role in U.S. economic and national security interests hinges on a robust power grid. (House AI Report, December 2024).
  • Recommendations from the Bipartisan House AI Task Force report include:
    • Develop metrics and standards to measure energy use and efficiency.
    • Allocate infrastructure costs to customers who benefit most from upgrades.
    • Use AI to improve energy infrastructure, production, and efficiency.

EPA’s Energy Data Campaign

  • Looking ahead, utilities, policymakers, and data center operators must collaborate to balance priorities such as grid upgrades, renewable energy procurement, water resource management, and equitable cost allocation. (Deloitte, Dec. 9)
  • This week, EPA continued its building energy data campaign to assist real estate owners in coordinating with utilities to access tenant space energy data.
  • To aid both owners, operators, and utility representatives in understanding this issue and potential solutions, EPA has prepared a number of energy data resources that can be found here.

A resilient electric grid is critical to sustaining economic growth. These issues will be featured in discussions at The Roundtable’s State on the Industry meeting on Jan. 22-23.